United States District Court, E.D. California
FINDINGS AND RECOMMENDATIONS AND ORDER ON
DEFENDANT'S SECOND MOTION TO DISMISS AND PLAINTIFF'S
INJUNCTION MOTION (ECF NOS. 14, 20.)
KENDALL J. NEWMAN, UNITED STATES MAGISTRATE JUDGE.
case concerns a foreclosure by Defendant Wells Fargo Bank of
Plaintiff s home.(ECF Nos. 1-2, 13.) In her First Amended
Complaint, Plaintiff initially attacked Wells Fargo's
conduct in her underlying bankruptcy action. (See
ECF No. 1-2.) The Court dismissed these claims with
prejudice. (ECF Nos. 10, 12.) However, the Court
granted Plaintiff leave to amend her Homeowners Bill of
Rights (“HBOR”) claim--that Defendant failed to
establish a single point of contact as required by Cal. Civ.
Code § 2923.7--because the Complaint failed to allege
sufficient facts. (See ECF No. 10 at pp. 6-7.)
however, Plaintiff submitted a Second Amended Complaint with
four new claims, none of which concerned her “single
point of contact” claim under the HBOR. (ECF No. 13.)
Defendants now move to dismiss all claims in the Second
Amended Complaint with prejudice for violating Federal Rule
of Civil Procedure 15(a)(2). (ECF No. 14.) Plaintiff opposes,
and has moved for a preliminary injunction to stop certain
eviction procedures. (ECF Nos. 16, 20.)
Plaintiff has abandoned her original HBOR claim, so leave to
amend should be withdrawn.
initial matter, the Court notes that Plaintiff was only
granted leave to amend her HBOR claim against Wells Fargo
concerning the “failure to establish a single point of
contact, ” as alleged in the First Amended Complaint.
(ECF No. 1-2.) In the Court's prior findings and
recommendations, the undersigned informed Plaintiff that if
she wished to amend this claim, she needed to present facts
to indicate that she requested a single point of contact and
that Wells Fargo's failure to establish the service led
to the trustee sale. (ECF No. 10 at p. 7, citing Shupe v.
Nationstar Mortgage LLC, 231 F.Supp.3d 597, 603 (E.D.
Cal. 2017), and Jerviss v. Select Portfolio Servicing,
Inc., 2015 WL 7572130, *6 (E.D. Cal. Nov. 25, 2015).)
Plaintiff's Second Amended Complaint does assert an HBOR
claim, but does so under a different section of that statute
and with different facts--essentially stating a new claim.
(See ECF No. 13.) Thus, Plaintiff has abandoned her
original HBOR claim under Cal. Civ. Code § 2923.7, and
leave to amend this claim should be withdrawn. See
Brannigan v. Baughman, 2017 WL 3913909, at *5 (E.D. Cal.
Sept. 7, 2017) (“Although Brannigan raised an
ineffective assistance of counsel claim in his initial
petition, that claim solely related to counsel's failure
to call certain witnesses at trial, which was abandoned in
the amended petition.”); U.S. v. Sekhon, 2017
WL 6507247, at *5 (E.D. Cal. Dec. 20, 2017) (same result);
see also Lacey v. Maricopa Cty., 693 F.3d 896, 928
(9th Cir. 2012) (“[W]e will consider [dismissed] claims
to be waived if not [repleaded].”).
Plaintiff's Second Amended Complaint, asserting four new
claims, should be treated as a request to
amend--which should be denied.
of complying with the Court's instructions in the first
Findings and Recommendations (ECF No. 10) regarding
amendment, Plaintiff filed a Second Amended Complaint that
asserted four new claims against Wells Fargo. (ECF No. 13.)
Given Plaintiff's pro se status, the Court construes her
filing as a motion to amend her complaint, reviewable under
Federal Rule of Civil Procedure 15(a)(2).
Federal Rules of Civil Procedure provide that, following a
first amended pleading, “a party may amend its pleading
only with the opposing party's written consent or the
court's leave.” Fed.R.Civ.P. 15(a)(2). Leave to
amend “shall be freely given when justice so
requires.” AmerisourceBergen Corp. v. Dialysist
West, Inc., 465 F.3d 946, 951 (9th Cir. 2006). However,
leave to amend may be denied when any of the following
factors are at play: (1) bad faith, (2) undue delay, (3)
prejudice to the opposing party, (4) futility of amendment,
and (5) whether there has been previous amendment.
Id.; see also Eminence Capital, LLC v. Aspeon,
Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the
above factors to be considered when deciding whether to grant
leave to amend, and reminding that “the consideration
of prejudice to the opposing party . . . carries the greatest
plaintiff's proposed amendments are futile if the amended
complaint would be subject to dismissal. Californians for
Renewable Energy v. California Pub. Utilities
Comm'n, 922 F.3d 929, 935 (9th Cir. 2019).
“The test for futility is identical to the one used
when considering the sufficiency of a pleading challenged
under Rule 12(b)(6) of the Federal Rules of Civil
Procedure.” Karol v. Med-Trans, 2012 WL
3862148, at *4 (E.D. Cal. Sept. 5, 2012) (citing Miller
v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir.
1988)). Therefore, “a proposed amendment is futile only
if no set of facts can be proved under the amendment to the
pleading that would constitute a valid and sufficient
claim.” Id; see also ECF No. 10 at
pp. 4-5 (citing the standards for notice pleading under Rule
8, the standards for dismissal under Rule 12(b)(6),
interpreting pro se pleadings, and the Ninth Circuit's
standards for granting leave to amend).
reasons stated below, the Court finds that Plaintiffs
proposed amendments to her pleadings should be denied. The
Court has reviewed each of the claims under Rule 12(b)(6) and
finds they would be subject to dismissal--thus, futile.
“Breach of Contract” claim alleges Wells Fargo
failed to notify her that she could have “cure[d] the
default and avoid[ed] acceleration and foreclosure by
accepting a mortgage modification.” (ECF No. 13 at
¶ 63.) Plaintiff asserts that Wells Fargo was
“required to offer her a mortgage modification but
failed to do so.” (Id.) Plaintiff has not,
however, asserted the contractual language on which she bases
her claim, leaving her allegation conclusory at best.
Frontier Contracting, Inc. v. Allen Engineering
Contractor, Inc., 2012 WL 1601659, at *4 (E.D. Cal. May
7, 2012) (“A written contract may be pleaded either by
its terms - set out verbatim in the complaint or a copy of
the contract attached to the complaint and incorporated
therein by reference - or by its legal effect. In order to
plead a contract by its legal effect, plaintiff must allege
the substance of its relevant terms.”) (citing
McKell v. Washington Mutual, Inc., 142 Cal.App.4th
1457, 1489 (2006)). In fact, the bulk of Plaintiff s opening
allegations (ECF No. 13 at ¶¶ 20-58) concern Wells
Fargo's actions in relation to the Home Affordable
Modification Program (“HAMP”), which does not
provide a remedy under breach of contract. See,
e.g., Escobedo v. Countrywide Home Loans,
Inc., 2009 WL 4981618, at *3 (S.D. Cal. Dec. 15, 2009)
(finding a lack of standing to bring a breach of contract
claim related to HAMP because nowhere is it required that the
lender institute unilateral modifications); see
also, e.g., Villa v. Wells Fargo Bank,
N.A., 2010 WL 935680, at *3 (S.D. Cal. Mar. 15, 2010)
(finding Escobedo as persuasive because “the HAMP
agreement did not require loan servicers to modify eligible
loans; thus, the court found borrowers lacked standing to
enforce the agreement.”).
Claim II for “Wrongful Foreclosure” would also
fail under Rule 12(b)(6). The core of her allegation is,
again, that Wells Fargo was required to notify her of her
right to modify before accelerating and foreclosing. However,
these conclusory allegations do not support a wrongful
foreclosure claim, which requires (1) an illegal, fraudulent,
or willfully oppressive sale of the home; (2) harm to the
Plaintiff; and (3) full tender (unless excused). See In
re Mortg. Elec. Registration Sys., Inc., 754 F.3d 772,
784 (9th Cir. 2014). Plaintiff asserts she was excused from
tendering because of Wells Fargo's averred duty to notify
her of her options under HAMP. (ECF No. 13 at ¶ 68).
However, excuses from California's tender requirement
are: (1) the underlying debt is void; (2) the foreclosure
sale or trustee's deed is void on its face; (3) a
counterclaim offsets the amount due; (4) specific
circumstances make it inequitable to enforce the debt against
the party challenging the sale; or (5) the foreclosure sale
has not yet occurred. Id (citing Chavez v.
Indymac Mortg. Servs., 219 Cal.App.4th 1052 (2013)). As
discussed above, Plaintiff has no such guarantee under HAMP,
so these tender ...